The Securities and Exchange Board of India (Sebi) on Friday proposed increasing the investment threshold set for granular disclosures by foreign portfolio investors (FPIs) from Rs 25,000 crore to Rs 50,000 crore.
The proposal to increase the threshold is on account of a rise in daily market turnover, said Sebi in a consultation paper floated on Friday.
Under the August Circular, or the additional disclosure framework by Sebi, FPIs holding more than 50 per cent of their Indian equity AUM in a single Indian corporate group or holding more than Rs 25,000 crore of the equity AUM in the Indian markets are mandated to give disclosures of ownership.
The watchdog has provided exemption to specific FPIs and government-owned funds from the disclosure requirement.
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Sebi had introduced the framework to address concerns on circumventing minimum public shareholding (MPS), Press Note 3, and other norms.
“The potential to disrupt the functioning of the market has to be evaluated relative to the size of the market. In this regard, a broad market parameter such as turnover can be used as a factor to assess the size of the market,” said Sebi.
The regulator said the average daily turnover in the capital market segment of the National Stock Exchange had increased 122 per cent from FY23 to FY25 (till December).
At the end of FY23, the average daily turnover stood at around Rs 53,500 crore while at the end of December 2024, it was Rs 1.18 trillion.
Market players said the rise in the threshold was on the account of increase in market liquidity and made it conducive to investment in India. Further, it takes into consideration the recent depreciation of the rupee, they added.
Sebi has sought comments on the proposals till January 31.